Assign Inventory Valuation Methods to Items
The account set that an item uses determines its item valuation method. This means that assigning or changing the item valuation method really involves two steps:
Step 1: If necessary, create a new account set for the item valuation method.
Step 2: Use the Items form or the Items Wizard to assign the account set to inventory items.
Before
you start
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Print the Account Sets report to see the inventory valuation methods assigned to account sets.
Double-click the Account Sets icon in the Setup Reports folder to open the report.
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If changing existing account sets, print the Item Status report, including the Profile information for the account sets you want to change, so you know which items will be affected.
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If changing the account sets and/or costing method of existing items, print the Item Valuation report for all items that are changing.
You will need to transfer the asset amount of all items that you change from the old inventory control accounts to the new control accounts in the General Ledger after updating item records.
To assign the inventory valuation method to an account set:
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Open Inventory Control > I/C Setup > Account Sets.
Click here for help on Account Sets fields.
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Fill in the fields on the Account Sets form as follows:
Account Set Code. Type a code of up to six characters to identify the account set.
Description. Type a description for the account set.
Costing Method. Select the costing method that you want the account set to use for valuing your inventory and determining the cost of goods sold.
For more information, see Costing Methods.
General Ledger Accounts. Enter general ledger account numbers for the inventory control, payables clearing, adjustment write off, assembly cost credit, non stock clearing, transfer clearing, shipment clearing, disassembly expense, and physical inventory adjustment accounts that make up the set.
Click the Finder or press F5 to display a list of general ledger account numbers. Highlight the account you want, and then press Enter to select it.
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Click the Add button.
To assign or change the inventory costing methods for an item:
Note: Inventory Control will display an error message if you attempt to change account sets for an item while there are posted transactions for the item for which Day End Processing has not been run.
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Open Inventory Control > I/C Items and Price Lists > Items.
Click here for help on Items fields.
Or
Open Inventory Control > I/C Items and Price Lists > Items Wizard.
Click here for help on Items Wizard fields.
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If adding a new item, see Add Inventory Items.
If changing the costing method for an existing item:
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If using the Items Wizard, click the Next button to move to the data first entry Wizard page.
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Enter the item number or select the item number from the Finder.
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Click the Finder button beside the Account Set Code field.
The Finder displays the account set codes, along with their description, status, and costing method.
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Select the new costing method, and then click the Save button at the bottom of the form.
If using the Items Wizard, you will have to click the Next button until the Done button appears, and then click Done to save the changes.
Warning!
If you ship units of an item that use the standard costing method, and you have not entered a standard cost, I/C calculates the cost of goods sold using a standard cost of zero.
Similarly, if you ship units of an item that uses most recent costing, and you have not received any stock or entered a most recent cost, I/C calculates the cost of goods sold using a most recent cost of zero.
After
changing inventory costing methods
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Print the Item Status report, including the Profile information for the account sets you want to change, to check the items that you changed.
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You will need to transfer the asset amount from the old inventory control accounts to the new control accounts in the General Ledger after updating item record account sets. (Otherwise, you will have old balances that are never reconciled.)